XAU/USD grapples with resistance in the vicinity of the $1,910 multiweek low

Posted on August 14, 2023 by Richardmadrian@gmail.com

The price of XAU/USD slightly declines in the Asian session on Monday, reaching the range of $1,910 to $1,911. This marks its lowest point since July 7 in the previous hour. Although there’s a minor downward movement within the day, it’s important to note that there isn’t a significant continuation of selling pressure. This calls for a cautious approach from aggressive bearish traders, suggesting that careful consideration is needed for those looking to capitalize on a potential extension of the downward trend observed over the past three weeks or thereabouts.

Anticipation of additional tightening measures by the Federal Reserve (Fed) propels the US Dollar to reach a new high in six weeks, creating a significant obstacle for the Gold price, which lacks yield. These expectations gained further support from the recent United States (US) Producer Price Index (PPI) figures for July, surpassing modest predictions. Notably, the US Bureau of Labor Statistics indicated a notable year-on-year increase of 0.8% in the PPI for final demand during the specified month, a substantial rise compared to the previous stagnant reading in June.

Amidst a backdrop of modest growth in consumer prices during July, the data indicates that the struggle to reestablish inflation within the Federal Reserve’s 2% target range is ongoing. This situation maintains the possibility of another 25 basis points (bps) increase in the Fed’s interest rates by the close of this year, while also fostering an environment conducive to a continued upward trajectory in US Treasury bond yields. Consequently, this dynamic remains supportive of a strengthening US Dollar, which consequently applies a downward force on the value of Gold priced in US Dollars.

However, apprehensions regarding deteriorating economic circumstances in China, coupled with geopolitical uncertainties, may offer a degree of backing to the safe-haven XAU/USD, potentially curbing its decline, at least temporarily. In the most recent event, a Russian warship discharged cautionary shots at a cargo vessel in the southwestern Black Sea on Sunday. This development follows Russia’s decision in July to suspend its involvement in a significant UN-mediated grain agreement that permitted Ukraine to ship agricultural goods through the Black Sea.

Still, the previously mentioned underlying fundamentals appear to strongly favor bearish traders, indicating that the prevailing direction for the Gold price continues to lean towards decline. Consequently, any efforts towards a rebound are prone to encountering selling pressure and run the risk of losing momentum swiftly. With no significant market-altering economic data anticipated for Monday, the movements in USD pricing will persist as a pivotal factor, exerting substantial influence on XAU/USD and generating prospects for short-term trading.

GBP/USD Strives to Surpass the 1.2779/93 Resistance Barrier to suppress downside bias

Posted on August 11, 2023 by Richardmadrian@gmail.com

In the second quarter, the UK economy surpassed expectations with a growth of 0.2%, outperforming forecasts of no growth. Notably, June exhibited even stronger growth at 0.5%, surpassing the projected 0.2%. Darren Morgan, the director of economic statistics at the Office for National Statistics (ONS), highlighted the robust performance of various sectors, including publishing, car sales, and legal services within the services industry. However, the positive momentum was tempered by declines in the health sector, which faced setbacks due to strike action.

The year-on-year GDP estimate surged significantly to 0.9%, surpassing the projected 0.5% and marking a substantial improvement from the previous -0.4%.

Furthermore, both manufacturing and industrial production exceeded expectations. Notably, the volatile construction orders reading witnessed a substantial leap, soaring from -14.3% in the previous month to 2.6%.

[[GBP/USD]] daily technical analysis

Despite the encouraging data, the British Pound remains relatively stable in early trading. Against the US dollar, it stands at 1.2715, representing a modest increase of about 0.3%, and it also demonstrates a slight improvement of around 0.15% against the Euro at 0.640.

The Bank of England will likely welcome the current developments, potentially influencing their considerations leading up to the upcoming monetary policy meeting. However, suppose the forthcoming Consumer Price Index (CPI) figures, scheduled for release next week, reveal a significant deceleration in UK inflation. In that case, the Monetary Policy Committee (MPC) might opt to maintain the existing interest rates at the upcoming session.

While the positive economic impetus could provide support for the British Pound, the lack of rate adjustments remains a crucial factor that hinges on incoming data. Consequently, the British Pound might encounter challenges in climbing higher over the forthcoming weeks.

Moving Averages and Indicators

The [[GBP/USD]] technical analysis reveals a nuanced picture based on key indicators. Currently, 11 indicators stand neutral, while 9 indicators suggest a sell signal and 5 indicators indicate a buy signal. The current price is at 1.27018, slightly below the 50-DAY SMA at 1.27624. Oscillators show 3 indicators in a neutral position, 8 indicating a sell, and none suggesting a buy signal.

Examining moving averages, we observe 8 indicators in a neutral stance, 1 indicating a sell, and 5 signalling a buy. To shift the immediate downside bias, a close above resistance from the 13-day exponential average and the recent reaction high at 1.2779/93 is necessary. However, for a stronger affirmation of the broader uptrend, a breakthrough above the recent ‘outside day’ high at 1.2997 is required. Such a move could pave the way for a resurgence of strength towards the 1.3143 high and eventually target the level of 1.3400/14.

The RSI stands at 42.3, indicating a neutral sentiment, while the MACD is at a negative -0.02, signifying a sell signal. This comprehensive analysis suggests that while the [[GBP/USD]] pair faces some immediate challenges, a decisive breakthrough of key levels could potentially reignite its broader upward trajectory.

Bitcoin price inches closer to $30K after Inflation data

Posted on August 10, 2023 by Richardmadrian@gmail.com

Bitcoin price analysis: In the previous month, after the US Bureau of Labor Statistics published data about CPI inflation on July 12, the price of Bitcoin went up by 4%, reaching a new highest point for 2023 at $31,500. We’re now wondering if a similar pattern will occur this month. To understand this, let’s examine the underlying factors of Bitcoin.

Recent days have shown a surge in momentum for Bitcoin, with double-digit growth in on-chain transactions over the last four days.

Looking back at history, we can see that Bitcoin has often experienced a rally when the market anticipates a decrease in CPI or a cautious increase. For instance, the CPI data released on July 12 indicated that inflation had only risen by a mild 1% in the prior month. In response, the price of Bitcoin had increased by 5% during the week leading up to the CPI release and then experienced an additional 4% surge after the release. This propelled it to a new peak for 2023. A similar trend seems to be occurring this week. With the new CPI data available today, the Bitcoin price has come closer to the $30,000 mark.

Bitcoin ( [[BTC/USD]] ) price data from on-chain sources suggests that cryptocurrency traders are preparing for another round of positive price movement in anticipation of the current release of inflation data.

According to the on-chain data, the volume of Bitcoin transactions denominated in BTC has been progressively increasing for four consecutive trading days. As shown in the chart below, the BTC Transaction Volume on August 6 was 147,670 transactions. By the end of August 9, it had rapidly risen to 302,500 transactions. This represents an impressive 104% surge in trading activity ahead of the August 10 CPI inflation data release.

The technical analysis of Bitcoin’s price indicators and oscillators presents a mixed outlook. The indicators lean towards a predominantly bullish sentiment, with 19 indicators signaling a buy, 10 neutral, and 3 indicating a sell. Similarly, the oscillators are relatively positive, with 2 indicators suggesting a buy, 9 neutral, and none indicating a sell. Moving averages show a slightly bullish trend, with 1 buy, 1 neutral, and 3 sell signals. The Relative Strength Index (RSI) stands at a neutral 53, indicating a balanced market momentum. The Moving Average Convergence Divergence (MACD) displays a strong bullish signal at -72, implying potential upward momentum. Overall, while there is some mixed sentiment, the MACD and RSI suggest a potential bullish trajectory for Bitcoin’s price in the near term.

Considering these factors, it appears that there is a mixed sentiment in the market with both bullish and neutral indicators. While historical patterns and recent transaction volume suggest potential positive movement, it’s important to keep an eye on the upcoming CPI inflation data release and its impact on Bitcoin’s price.

Gold price in bearish zone as market anticipates inflation data

Posted on August 10, 2023 by Richardmadrian@gmail.com

Gold price analysis today

[[XAU/USD]] has faced a notable downturn due to the recent surge in risk aversion, primarily driven by escalating tensions between Russia and Ukraine. Despite the anticipation that a U.S. credit rating downturn would typically push Gold prices upward, the market witnessed an unexpected twist. On Friday, Gold prices experienced a significant decline, hitting a 4-week low at $1925, defying the usual correlation between credit rating downturns and Gold’s upward movement.This departure from the norm has puzzled many market observers.

In May, there was a notable failure of the bulls to test a new all-time high for Gold. Since then, the precious metal has been on a downward trajectory, a pattern that stands in contrast to the historical tendency of Gold prices to rise during times of increased risk aversion and credit rating downgrades.The intricate interplay between geopolitical tensions, economic indicators, and investor sentiment has led to this intriguing market behavior. The current divergence from the anticipated price movement underscores the complexity of factors influencing Gold’s value.

Credit ratings downgrades

When we examine the precedent set by previous credit rating downgrades, an interesting observation emerges: gold has historically managed to capitalize on such situations. It’s worth considering that the current divergence between gold’s response and the expected trend could be a result of a lagged consequence, wherein the full impact of the downgrade is yet to be fully realised. In light of these intriguing dynamics, there is a possibility that gold might be on the cusp of an impending upside rally.

While the current circumstances appear to challenge conventional logic, the historical resilience of gold in the face of credit rating downgrades suggests that the precious metal could be gearing up for a significant price surge. As investors reassess their risk appetite and seek safe-haven assets amid the ongoing geopolitical tensions and economic uncertainties, the potential for a bullish momentum in the gold market becomes a compelling scenario to watch closely.

Upcoming data & information about the US economy has changed how likely it is that the Fed will change interest rates in the future. Right now, it looks like they might wait before possibly lowering the rates in early 2024. If the US dollar gets weaker, the price of gold might go up. But we need to wait for more data about the US economy, like the US CPI that’s coming out today, to really understand what’s happening.

[[XAU/USD]] Technical Analysis/Forecast

GOLD price analysis chart

According to our Gold price analysis for today, the price of gold has stopped falling for now, staying around the new lowest price of $1,916 this month. But it’s not in a strong position and might keep going down. It has been consistently lower than the 20 and 50-day EMAs, which show how the price is changing. Now, it’s heading towards the 200-day EMA at around $1,907. The momentum indicators are close to a point where they show support, but if the price keeps falling, it could lead to a stronger downward movement.

Read yesterday’s Gold Headed Below $2,000 Again As It Keeps Acting Like A Risk Asset to gain more perspective about Gold’s current conditions.

Bitcoin Traders Unfazed by Strong PCE Data: Examining the $28K Price Range

Posted on July 28, 2023 by Richardmadrian@gmail.com

[[BTC/USD]], the popular cryptocurrency pair, is currently trading at $29,368, showing a slight bearish bias in the market sentiment. The main support level for the asset has been identified at $28,970, a critical price level that has historically acted as a strong foundation for BTC’s price movements.

At present, the Relative Strength Index (RSI) for [[BTC/USD]] stands at 45. This value indicates that the selling pressure is prevailing over buying pressure in the market. However, it is important to note that the RSI is still above the oversold threshold of 30, which suggests that the market has not reached an extreme bearish condition. Traders should closely monitor the RSI to assess any potential shifts in momentum.

One of the key technical indicators used in this analysis is the Moving Average Convergence Divergence (MACD). Currently, the MACD for BTC/USD is recorded at -104. This significant negative value of the MACD line indicates that the short-term moving average is substantially lower than the long-term moving average. This bearish crossover suggests that there is a potential downtrend forming in the BTC/USD pair.

In the short term, the immediate hurdle for [[BTC/USD]] is at $29,863. If the price manages to surpass this level, it could signal a potential reversal in the short-term bearish trend. However, given the current market conditions, the bulls might face considerable resistance at this hurdle, making it a critical level to watch closely.

Bearish traders are eyeing the $28,000 price level as their target. If the bears successfully breach the main support level at $28,970, it could trigger further selling pressure, potentially pushing the price lower towards the $28,000 mark. On the other hand, for the bulls to regain control, they must defend the support level and aim to break above the immediate hurdle.

A comprehensive analysis of various technical indicators can provide deeper insights into market sentiment. The analysis considers nine sell signals, nine neutral signals, and eight buy signals from various indicators. The mixed signals suggest that the market sentiment is currently uncertain and indecisive, with no clear dominant trend. Traders should exercise caution and wait for a clearer picture before making significant trading decisions.

Additionally, the analysis of oscillators is also essential to gauge market momentum. Currently, the oscillators show one sell signal, eight neutral signals, and two buy signals. Similar to the indicators, the oscillators’ mixed signals indicate that traders are adopting a wait-and-see approach, possibly awaiting further market developments before committing to a specific direction.

Moving averages are crucial indicators that offer valuable insights into the overall trend. In this analysis, eight sell signals, one neutral signal, and six buy signals are observed. The multiple sell signals reflect the presence of bearish pressure, but the conflicting signals from other indicators highlight the market’s current state of uncertainty.

In conclusion, [[BTC/USD]] is experiencing a slight bearish bias, with the main support level at $28,970 and an immediate hurdle at $29,863. The RSI and MACD both indicate a bearish sentiment, while the mixed signals from various indicators and oscillators suggest a state of indecision in the market. Traders and investors should closely monitor these key levels and indicators to make informed decisions, as the cryptocurrency market can be highly dynamic and subject to sudden shifts in sentiment.

BTC/USD Daily Analysis Chart

USD/CAD Hits Ceiling at 1.3250 Despite Lukewarm Canadian Data

Posted on July 28, 2023 by Richardmadrian@gmail.com

The USD/CAD currency pair is currently trading at 1.3233, and recent market movements indicate that the bulls have gained substantial strength in the 2-day chart. This newfound momentum has enabled them to surpass a key resistance level at 1.3244, despite facing a temporary dip to the 1.3200 area following the release of both US and Canadian economic data. Notably, the bulls quickly regained their power during the early stages of today’s Europe Session, showcasing their resilience in the face of market challenges.

Examining the technical indicators, we find that the Relative Strength Index (RSI) currently stands at 50, which signals a neutral position in the market. This suggests a balanced stance between buying and selling pressures. The Moving Average Convergence Divergence (MACD) for USD/CAD is displaying a negative value of 0.002, which typically presents a buying opportunity. The negative value indicates a convergence of the short-term and long-term moving averages, which could imply further upward movement in the pair.

On the flip side, the bears have set their sights on the main support level at 1.3119, indicating their intent to drive the USD/CAD exchange rate lower. It is crucial for traders to monitor this support level closely, as a break below it might signal a shift in the overall trend towards bearish territory.

Analyzing the overall sentiment from various technical indicators, we find that 8 indicators are suggesting a sell, 10 are neutral, and 7 indicate a buy signal. The oscillators further reinforce the mixed sentiment, with 1 sell signal, 9 neutral signals, and 1 buy signal. The moving averages provide a more optimistic outlook, with 6 buy signals, 7 sell signals, and 1 neutral signal. This divergence in signals suggests a certain level of uncertainty in the market and highlights the need for traders to exercise caution and stay vigilant.

Given the current technical analysis for USD/CAD, traders should be aware of the potential risks associated with both bullish and bearish scenarios. While the bulls have demonstrated considerable strength in overcoming resistance, the presence of bearish targets and sell signals warrants careful consideration. The neutral RSI suggests that market participants are undecided, which could lead to increased volatility in the near term.

In conclusion, the USD/CAD technical analysis indicates that the currency pair is in a critical juncture. The bulls’ recent strength and ability to breach resistance levels are promising signs, but traders must be mindful of potential bearish pressures and the important support level at 1.3119.

USD/CAD Price Analysis

NZD/USD Technical Analysis: Pair Shows Resilient V-Shape Recovery as Market Attention Turns to US Economic Data

Posted on July 28, 2023July 28, 2023 by Richardmadrian@gmail.com

According to our NZD/USD technical analysis, the NZD/USD currency pair encountered robust buying demand around the 0.6120 level following a decline during the European trading session.

The New Zealand Dollar (Kiwi) is exhibiting a V-shaped recovery as the US Dollar faces scrutiny ahead of the release of the United States Q2 Employment Cost Index and Core Personal Consumption Expenditure (PCE) Price Index data, scheduled for publication at 12:30 GMT.

During the London session, S&P 500 futures recorded substantial gains, reflecting a notable recovery in market participants’ risk appetite.

On Thursday, US equities experienced considerable downward pressure due to the optimistic performance of the United States economy in the April-June quarter, which alleviated concerns about a potential interest rate hike by the Federal Reserve (Fed) in September.

The US Q2 Gross Domestic Product (GDP) and June’s Durable Goods Orders data both showed strong results, signalling a solid momentum in consumer spending. Additionally, last week’s jobless claims remained low, indicating that firms’ employment programs are sustaining their momentum.

Moving forward, investors will closely monitor the Fed’s preferred inflation gauge. However, its impact is anticipated to be limited as Federal Reserve officials are likely to place greater emphasis on the July Personal Consumption Expenditures (PCE) data while making policy decisions for September. Analysts at BBH (Brown Brothers Harriman) predict that the headline PCE is expected to be at 3.0% year-on-year compared to 3.8% in May, while the core PCE is projected to be at 4.2% year-on-year versus 4.6% in May.

New Zealand Dollar investors will be closely monitoring the release of Q2 Employment data, scheduled for Wednesday. New Zealand’s jobless rate has consistently remained at record lows. If there are signs of loosening labour market conditions, it could provide room for the Reserve Bank of New Zealand (RBNZ) to keep interest rates unchanged at 5.5%.

NZD/USD Technical analysis

The NZD/USD currency pair has been experiencing significant movements on the intraday chart, with the current price at 0.6157 showing signs of breaching the intraday high at 0.61829. This development could potentially provide the bulls with more strength to retest yesterday’s high at 0.62738.

Analyzing the technical indicators, we find that there are 16 sell signals, 8 neutral signals, and only 1 buy signal. This suggests that there is currently a bearish bias in the market sentiment. However, the oscillators present a more optimistic view, with 3 sell signals, 1 neutral signal, and 7 buy signals, indicating a potential reversal in the near future.

Looking at the moving averages, the picture remains bearish, with 13 sell signals and just 1 neutral signal, without any buy signals to counteract the prevailing trend. This further supports the idea that the bearish momentum might still have an upper hand in the short term.

On the other hand, the MACD reading of 0.00045 is relatively small, indicating that there might be some weakening of the bearish momentum. This could be a potential signal for a reversal or consolidation in the near future.

The Relative Strength Index (RSI) currently stands at 44.71, which falls in the neutral territory. It suggests that the market is neither oversold nor overbought at the moment, giving some room for price movements in either direction.

Overall, the current price action and technical indicators paint a mixed picture for the NZD/USD pair. While the breach of the intraday high could embolden the bulls and lead to a retest of yesterday’s high, the prevailing sell signals from the indicators and moving averages signal caution.

Australian dollar still tracing downwards after the US Q2 GDP report

Posted on July 28, 2023July 28, 2023 by Richardmadrian@gmail.com

If the [[AUD/USD]] exchange rate manages to surpass this key hurdle, it could signal a shift in the outlook from sideways to a more bullish trend in the longer term.

The Australian Dollar (AUD) faced significant downward pressure against the US Dollar (USD) on Friday, primarily driven by a series of factors. Firstly, the release of better-than-expected US GDP data for the second quarter on Thursday has bolstered the strength of the US Dollar. This positive economic data likely indicates a robust economic recovery in the US, which can lead to increased investor confidence in the USD and capital flows towards the US economy.

Secondly, the Federal Reserve’s preferred inflation gauge, Personal Consumption Expenditure (PCE), unexpectedly rose on a month-on-month basis. This increase in inflation indicates potential concerns about rising prices and may prompt the Federal Reserve to consider tightening its monetary policy to control inflation. As a result, investors may shift their investments towards the USD in anticipation of higher interest rates, making the Australian Dollar less attractive in comparison.

On the other hand, the Australian Dollar has been cascading down against the USD, breaking through all major daily Simple Moving Averages (SMA). SMA is a widely used technical indicator, and a breach below these averages suggests a bearish sentiment and a potential continuation of the downtrend.

The latest Core PCE data shows that prices gained 0.2% on a month-on-month (MoM) basis, which aligns with market expectations. This indicates a stable inflation rate in the US and suggests that the Federal Reserve’s efforts to control inflation may be yielding some results.

However, on a year-on-year (YoY) basis, Core PCE increased by 4.1%, which is slightly lower than the market’s expectations of 4.2% and a decrease from the previous month’s 4.6%. While the YoY figure is still elevated, the moderation in the rate of price increases might be perceived positively by the markets as it could alleviate some concerns about runaway inflation.

Given these inflation figures, it’s essential to consider the implications for monetary policy. The Federal Reserve closely monitors inflation data to determine its policy decisions. With Core PCE showing a relatively stable MoM increase and a slightly lower YoY figure, the Federal Reserve may adopt a more cautious approach to raising interest rates, which could lead to a stabilization of the US Dollar.

On the long-term chart, a crucial resistance level is identified at 0.7158, which corresponds to the high recorded in February. If the [[AUD/USD]] exchange rate manages to surpass this key hurdle, it could signal a shift in the outlook from sideways to a more bullish trend in the longer term. Traders and investors would closely monitor the price action around this level, as a decisive break above it may lead to a potential uptrend in the future.

On the other hand, the 0.6458 level, established in June, acts as a significant support level for bears (sellers). If the [[AUD/USD]] exchange rate breaches this level decisively, it may indicate a more bearish sentiment from a longer-term perspective. In such a scenario, traders and investors might anticipate a potential downtrend or further weakening of the Australian Dollar against the US Dollar.

[[AUD/USD]] daily analysis chart

U.S Q2 GDP Growth Exceeds Expectations, Records stronger Yields and the Dollar

Posted on July 27, 2023 by Richardmadrian@gmail.com

As per the U.S. Department of Commerce, the gross domestic product (GDP), which represents the comprehensive gauge of goods and services produced within the country, exhibited robust growth in the second quarter. The GDP expanded at an annualized rate of 2.4%, surpassing initial expectations of 1.8%. This positive outcome is likely to alleviate concerns of an overly exaggerated recession and stands as a solid performance for the economy.

Taking a closer look at the report’s specifics, it’s evident that personal consumption expenditures, constituting around 70% of GDP, rose by 1.6% following a previous gain of 4.0%. This significant increase serves as a clear indication that households are still reluctant to curtail their spending, partly due to the robust and dynamic labour market conditions.

Moving on to other aspects, gross private domestic capital formation saw a notable increase of 5.7%. Within this category, business fixed investment experienced a significant jump of 4.9%, while residential investment, unfortunately, declined by 4.2%. Due to the anticipation of persistently high mortgage rates, the housing market might continue to face challenges, leading to a depressed state. However, there are promising signs that it could potentially be reaching a bottom, as suggested by other indicators.

All in all, the robust GDP data indicates that the economy continues to thrive, even in the face of the FOMC’s aggressive measures to curb activity and combat inflation. The significant increase in final sales to domestic producers, at a rate of 2.3% (4.3% nominal), reinforces this assessment and serves as a strong signal that internal demand remains remarkably resilient.

Following the release of the GDP report by the U.S. Bureau of Economic Analysis, there was an immediate increase in Treasury yields, leading to a boost in the value of the U.S. dollar. If economic growth maintains its pace and does not moderate, the Federal Reserve might feel compelled to implement further tightening measures later this year to prevent inflationary pressures from resurging. These expectations have the potential to keep yields biased towards the upside, particularly if forthcoming CPI and Core PCE results reveal signs of price stickiness.

As for the top trading opportunities in this quarter, investors should closely monitor developments related to interest rates, inflation data, and any potential Fed actions. The impact of these factors on Treasury yields and the U.S. dollar could present significant trading opportunities in the financial markets. Additionally, keeping an eye on sectors that are sensitive to economic growth and inflation can help traders identify potential winners and losers in the evolving market conditions.

Pound Sterling Surges Toward 1.3 Amidst Positive Market Sentiment and BoE Hawkishness

Posted on July 27, 2023 by Richardmadrian@gmail.com

Despite deepening fears of a recession in the United Kingdom’s economy, the Pound Sterling (GBP) strengthens following a modest correction, driven by the Bank of England’s (BoE) aggressive policy tightening measures.

Previously, the GBP/USD pair encountered some pressure, but the general sentiment towards the Pound Sterling remains bullish. There is an expectation of further interest-rate hikes from the UK central bank as they aim to steer inflation back to its target level.

The United Kingdom’s Treasury Advisers have expressed concerns regarding economic growth, attributing it to the central bank’s aggressive policy tightening. This approach has placed a heightened burden on firms operating within the country. Furthermore, the housing sector in the UK is experiencing the impact of higher borrowing costs, leading to a sharp decline in demand for property from first-time home buyers.

Advisers to UK Finance Minister Jeremy Hunt have flagged serious concerns about the rising risks of a recession, directly attributed to the sharp increase in interest rates implemented by the BoE. The Economic Advisory Council, comprising seven members, is urging the central bank to reconsider the pace of its rate-hiking spree, which has been the most rapid in three decades. They point to certain economic indicators that suggest a potential slowdown on the horizon for the UK’s economy.

Despite a slight softening of inflation in June, with the Headline Consumer Price Index (CPI) declining to 7.9% and the core CPI (excluding volatile food and energy prices) falling to 6.9%, it is still insufficient to provide relief to BoE policymakers and deter them from implementing an interest-rate hike in August. These declines are not substantial enough to indicate victory over inflation, which further adds to the pressure on the Pound Sterling.

In light of the data and concerns raised by the economic advisers, the GBP/USD currency pair is likely to remain volatile in the near term. Traders and investors will closely monitor any updates from the BoE regarding their stance on interest rates, as well as any incoming economic data that could shed light on the potential trajectory of the UK economy.

Uncertainty surrounding the central bank’s policy decisions and the economic outlook may result in fluctuations in the GBP/USD exchange rate, as market participants weigh the risks of recession against the potential for further rate hikes.

The Pound Sterling (GBP) has been displaying strength over the past two days, achieving a new weekly high at 1.2976. The currency pair, GBP/USD, known as the “Cable,” experienced a strong rebound after finding significant demand just below the 20-day Exponential Moving Average (EMA). This bullish move indicates a positive sentiment in the market.

With the currency pair resuming its upward movement, it is anticipated to challenge and potentially surpass the psychological resistance level of 1.3000. The breach of this key level could further boost the bullish momentum.

Traders and analysts are closely observing the Relative Strength Index (RSI) with a period of 14. A break above the 60 levels in the RSI would signal a strengthening bullish momentum in the market, potentially attracting more buyers and driving the GBP/USD exchange rate higher.